‘ADD’ CALL ON MAH SING STAYS

Developer actively looking to buy more land, which will enhance its sales outlook, says CIMB Research

MAH Sing Group Bhd is actively looking to increase its landbank, especially in the Klang Valley, according to CIMB Research.

More acquisitions would enhance Mah Sing’s sales outlook and potentially improve investor sentiment, it said.

Mah Sing bought three pieces of land for a combined RM436.4 million last year. They were a 3.64ha plot in Sentul with a gross development value (GDV) of RM1.3 billion), Cheras (4.53ha with GDV of RM2.2 billion) and Permatang in Penang (7ha with GDV of RM150 million).

CIMB Research said its recent share price retracement represented a good opportunity to accumulate Mah Sing shares.

“We keep our forecasts unchanged but have adjusted our target price lower to RM1.55, as we widened our real net asset value (RNAV ) discount to 25 per cent versus 20 per cent previously due to the rising interest rate environment,” said the firm in a report on Mah Sing’s latest interim results.

CIMB Research retained its “add” call on Mah Sing, given the strong sales momentum, aggressive project launches and healthy balance sheet.

As at the end of the first quarter of the year, the company was comfortably sitting on a net cash pile of RM142 million, unlike most of its peers, which are in a net debt position.

On its results, CIMB Research said Mah Sing’s first quarter core net profit came in within expectations at 20 per cent of its fullyear forecast, but below Bloomberg consensus expectations at 17 per cent.

“The quarterly core net profit (excluding the accrued distribution to perpetual sukuk holders and foreign exchange movement) declined 32 per cent year-onyear, mainly dragged down by weaker revenue recognised (-19 per cent) due to slower progress of work during the festive season, coupled with new projects at their initial stages of construction,” it said.